EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*sb0724*
SENATE BILL 724
Q8 2lr2787
CF HB 795
By: Senator King
Introduced and read first time: February 7, 2022
Assigned to: Budget and Taxation
Committee Report: Favorable
Senate action: Adopted
Read second time: March 18, 2022
CHAPTER ______
AN ACT concerning 1
Gross Receipts Tax on Short–Term Lease or Rental of Heavy Equipment 2
– Alterations 3
FOR the purpose of exempting governments from the tax on gross receipts from the 4
short–term lease or rental of heavy equipment property; repealing a requirement 5
that a person with gross receipts subject to tax to report certain information to the 6
county or municipal corporation where the heavy equipment rental business is 7
located; and generally relating to the taxation of short–term leases and rentals of 8
heavy equipment. 9
BY repealing and reenacting, with amendments, 10
Article – Local Government 11
Section 20–609 12
Annotated Code of Maryland 13
(2013 Volume and 2021 Supplement) 14
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 15
That the Laws of Maryland read as follows: 16
Article – Local Government 17
20–609. 18
(a) (1) In this section the following words have the meanings indicated. 19
2 SENATE BILL 724
[(2) “Gross receipts shortage” means the amount by which the property tax 1
calculated under subsection (e)(2) of this section that would have been due exceeds the total 2
gross receipts tax remitted under subsection (d) of this section. 3
(3) “Gross receipts surplus” means the amount by which the total gross 4
receipts tax remitted under subsection (d) of this section exceeds the amount of property 5
tax calculated under subsection (e)(2) of this section that would have been due.] 6
[(4)] (2) (i) “Heavy equipment property” means construction, 7
earthmoving, or industrial equipment that is mobile, including any attachment for the 8
heavy equipment. 9
(ii) “Heavy equipment property” includes: 10
1. a self–propelled vehicle that is not designed to be driven 11
on a highway; and 12
2. industrial electrical generation equipment, industrial lift 13
equipment, industrial material handling equipment, or other similar industrial equipment. 14
[(5)] (3) “Short–term lease or rental” means the lease or rental of heavy 15
equipment property for a period of 365 days or less. 16
(b) (1) Except as provided in subsection (c) of this section, there is a tax at a 17
rate of 2% on the gross receipts from the short–term lease or rental of heavy equipment 18
property by a person whose principal business is the short–term lease or rental of heavy 19
equipment property at retail. 20
(2) A person is in the principal business of short–term lease or rental of 21
heavy equipment property if: 22
(i) the largest segment of total rental receipts of the business is from 23
the short–term lease or rental of heavy equipment property; and 24
(ii) the business is described under Code 532412 of the North 25
American Industry Classification System as published by the United States Census 26
Bureau. 27
(c) The tax imposed under this section does not apply to: 28
(1) a business located in a county or municipality that does not impose a 29
personal property tax; OR 30
(2) A SHORT–TERM LEASE OR RENTAL OF HEAVY EQUIPMENT 31
PROPERTY TO THE FEDE RAL GOVERNMENT , THE STATE, A COUNTY, OR A 32
MUNICIPALITY . 33 SENATE BILL 724 3
(d) (1) A person who owns a business with gross receipts subject to the tax 1
under this section shall collect the tax from the rental customer and remit the tax as 2
provided in this subsection. 3
(2) The tax is payable quarterly and due by the last day of the month after 4
the end of the quarter. 5
(3) A person who owns a business with gross receipts subject to the tax 6
under this section shall remit the tax collected to: 7
(i) the county in which the business is located, if that location is not 8
within a municipality; or 9
(ii) the county and municipality in which the business is located in 10
proportion to the personal property tax rate of the county and municipality, if that location 11
is within a municipality. 12
(4) Notwithstanding any other law and except as otherwise provided in this 13
section, the gross receipts tax imposed under this section shall be administered and 14
collected according to the laws applicable to the personal property tax under the 15
Tax – Property Article. 16
(e) [(1)] A person who owns a business with gross receipts subject to the tax 17
under subsection (b) of this section shall submit[: 18
(i)] to the Department of Assessments and Taxation a report on 19
personal property as required under § 11–101 of the Tax – Property Article[; and 20
(ii) to the county or municipality where the heavy equipment rental 21
business is located a list of all personal property, including the original cost and date of 22
acquisition of the property, that: 23
1. is subject to the gross receipts tax under this section; and 24
2. is exempt from the property tax under § 7–243 of the Tax 25
– Property Article]. 26
[(2) For each person that submits a list under paragraph (1)(ii) of this 27
subsection, a county or municipality shall calculate the amount of property tax that would 28
have been due for all property that is exempt under § 7–243 of the Tax – Property Article. 29
(3) A county or municipality shall calculate the difference between: 30
(i) the total gross receipts tax remitted under subsection (d) of this 31
section by the person during the previous calendar year; and 32 4 SENATE BILL 724
(ii) the amount of property tax calculated under paragraph (2) of this 1
subsection that would have been due. 2
(4) (i) On or before February 28 of each year, a county or municipality 3
shall provide a statement to each person who owns a business with gross receipts subject 4
to the tax under subsection (b) of this section that includes: 5
1. the total gross receipts tax remitted under subsection (d) 6
of this section during the previous calendar year; 7
2. the total property tax calculated under paragraph (2) of 8
this subsection that would have been due; and 9
3. the gross receipts shortage or gross receipts surplus. 10
(ii) If the statement includes a gross receipts shortage, the county or 11
municipality shall include with the statement a bill for the amount of the gross receipts 12
shortage payable on or before March 31 of each year. 13
(5) The list required under paragraph (1)(ii) of this subsection shall be 14
submitted with the second quarterly payment required under subsection (d)(2) of this 15
section.] 16
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 17
1, 2022. 18
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.